9911796707
TMI Blog1985 (4) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... s ready-mixed paint. The appeal before us is against this Order. 2. The prayer in the appeal is that the impugned order be set aside and the Assistant Collector's order restored, i.e. the classification of the goods be declared to be under Item 14-I(3)(iii) CET as ready-mixed paints. 3. In appeal No. 2349/84-C, the appellant has moved an application for modification of the appeal memorandum. It is stated that the issue has been examined in detail and that it is considered that the goods are correctly classifiable as "Paints and enamels, not otherwise specified" under Item 14-1(5), CET. The prayer is that this classification may be considered. 4. In some of the appeals, the above additional ground is moved by way of separate application and in others, it is incorporated in the "grounds of appeal". 5. At the hearing before us, Shri R.N. Bajoria objected to the application in appeal No. 2349/84-C and the additional ground (G) in appeal Nos. 324 and 325/85-C since classification of the goods under Item 14-I(5) CET was not an issue before the lower authorities. The learned Counsel said that the introduction of this new ground would mean that the Department has given up the claim to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellate Assistant Commissioner could not be taken before the Income Tax Appellate Tribunal. 8. The above decision was rendered in the context of the provisions of the Income Tax Act, 1922. In so far as this Tribunal is concerned, Rule 10 of the Customs, Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 reads as follows:- "10. Grounds which may be taken in appeal. - The appellant shall not except by leave of the Tribunal, urge or be heard in support of any grounds not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or those taken by leave of the Tribunal under these rules: Provided that the Tribunal shall not rest its decision on any other grounds unless the party who may be affected has had a sufficient opportunity of being heard on that ground." The above rule empowers the Tribunal to grant leave to the appellant to urge or be heard in support of any grounds not set forth in the appeal memorandum. Of course, the Respondent, in that case, has to be heard on that grounds(s). 9. In Cynamid India Ltd. v. Collector of Central Excise, Bombay -1984 (15) E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for reasons recorded by the departmental authorities "in rejecting a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him." Section 35-C of the Central Excises and Salt Act, like the above referred to Section of the Income Tax Act, provides that the Appellate Tribunal may pass such orders on the appeal as it thinks fit. While in the case before the Supreme Court, it was the right of the assessee to raise a new plea not put forth before the lower authorities which was upheld, in the case before us it is the Department's (the appellant here) right to raise a new plea not put forth before the Appellate Collector that is under consideration. This, however, should not, in our view, make for any difference to the application of the ratio of the Supreme Court decision. For, in the proceedings before us, the Department is as much a party as the assessee and there is no warrant to treat the Department differently from the assessee in so far as the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a new Item under which it seeks to recover money it thinks is due to it, after it comes to feel that its old claim or demand may not succeed. To accept a party's making different claims at the appeal stage is to open doors of abuse and enable one party to make undue exaction and recoveries from the other which would not be in accordance with the law. 16. The decision of the Hon'ble Supreme Court, Commissioner of Income Tax, Madras v. Mahalaxmi Textile Mills, 1967 3 SCR 957 ruled that the relief should be granted if another ground is raised before the departmental authorities under the Tribunal. In the words of the Hon'ble Court: "if for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee grant of relief to him on another ground is justified, it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him". The court there was considering grant of relief to assessee on another ground which, for reasons recorded by the departmental authorities was justified. The Hon'ble court speaks of a ground wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a part of the old proceedings or demand notice, it becomes time barred and no recovery can be legal through this new assessment. 19. The additional evidence, therefore, is not for starting a new process under the old notices. This however, does not mean the party, whether Government or private, cannot present a claim under the new Item of assessment. Such new Item, however, will undergo all the trials and tests that the law has devised for the regulation and control of claims made by one side on the other. 20. It is necessary for an assessee to be able to present his case in all the forums before which he may want to go or may have to go in pursuit of his case. If it is an assessment he must have the opportunity to present his side of the dispute before the Assistant Collector, before the Appellate Collector and before the Tribunal. It would not do for the Tribunal to decide as assessment and thereby shut out one or the other party from the benefit of consideration of the competent authorities below it. The assessee cannot demand new assessment by making a new claim before the Tribunal, pleading that his claim to an amount of money is within the amount claimed already but wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f aluminium paste would have changed if the mixing with the medium would have been done before clearance. No paint company sells only paste or only medium. Moreover, clearance of paste and medium in correct proportion as per the mixing ratio, admit itself as ready mixed paint. In the dual pack, aluminium paste is labelled as "paste for aluminium paint" and medium is labelled as "medium for aluminium paint". To repeat again containers are marked as 'aluminium paint' though in dual containers there exists two chambers of two components, not mixed for technical reason and people but it as aluminium paint together and not as anything else." 26. On appeal before the Collector, Central Excise (Appeals) Calcutta, the decision of the Assistant Collector was set aside by the said Collector (Appeals) by observing as under :- "Since the aluminium paste and the medium are cleared by separate containers, even they are cleared as aluminium paint, duty cannot be demanded on it as a ready mixed paint because the aluminium paste and the medium are not yet mixed at the time of clearance." 27. On appeal before this Tribunal the department i.e. appellant took up the stand that aluminium paint clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready mixed paints and enamels' or under Tariff Item 14-I(5) CET as "paints and enamels not otherwise specified". It is not a case where the 'assessee' can allege that he had no opportunity to meet the case which is sought to be built up against him. Show cause notice issued against the assessee clearly show that the allegations which the assessee was to meet was that the aluminium paint cleared in 2 packs system are required to pay duty under Tariff Advice No. 23/81 dated 23-2-1981 and Trade Notice No. 67/PV/81, dated 3rd March, 1981 i.e. duty is to be paid on the composite product. It is not a new case which the department is seeking to raise now. It is duty of the Tribunal to decide the correct classification of the goods if that issue is before it. The Hon'ble Supreme Court in the case of Commissioner of Income Tax, Madras v. Mahalakshmi Textiles Mills Ltd. (supra) observed that all questions whether of law or of fact which relate to the assessment of the assessee may be raised before the Tribunal. 31. Under these circumstances, following the decisions of the, Hon'ble Supreme Court in Mahalakshmi Textiles Mills Ltd. (supra) and that of Special bench 'D' of the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal only to the subject matter of the appeal. Thus the Appellate Tribunal cannot go beyond the subject matter of the Appeal read with order appealed against. The proposition that 'a question of law can be raised at appellate stage even if it has not been raised at earlier stages of the proceedings', has no applicability here as the question of classification of goods is not merely a question of law but is a mixed question of fact and law (See English Electric Company v. Superintendent Central Excise - AIR 1975 Madras 395). Moreover, Section 11 A enacts a mandatory obligation on the Revenue to issue a show cause notice which cannot be circumvent in the garb of raising an additional new ground. The Supreme Court recently in the case of Lathia Industrial Supplier Co. Pvt. Ltd. v. Collector of Central Excise [1987 (29) E.L.T. 751 (S.C.)], has turn down the plea of the Department as to applicability of time limit to refunds, merely because no such plea was raised before the lower forum. In the light of this decision the departmental claim for classification of goods under altogether a different Tariff Entry can not be allowed to be raised for the first-time before the Appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
